Government to table amendments to proposed first-time buyer tax rebate
The Government is to table significant amendments to its proposed income tax rebate for first-time buyers, writes Daniel McConnell - Political Editor Irish Examiner.
This is after concerns were raised by the Central Bank in recent weeks.
The Irish Examiner has confirmed that Finance Minister Michael Noonan sought and secured Cabinet approval to reduce the thresholds for the scheme.
The scheme designed to help first-time buyers accumulate a mortgage deposit, will be lowered from its budget day limit of homes to the value of €600,000.
The changes are to be included in the Finance Bill which will be taken in the Dail today.
The original threshold had been criticised as a “mansion grant” by Fianna Fáil.
It is also understood that the Central Bank raised concerns that the scheme could encourage buyers to take on too much mortgage debt.
The concerns raised by the Central Bank will be addressed in the Finance Bill, to be published on Thursday.
However, any changes to the thresholds are likely to be made at a future date, expected to be when the Bill is at committee stage.
The new “help-to-buy” plans propose a rebate of income tax paid over the previous four years.
The rebate will be worth up to 5 per cent of the price of a home to a value of €400,000, allowing for a maximum rebate of €20,000.
However, the initial plans outlined that first-time buyers of homes up to €600,000 would also be entitled to the rebate, although it would be capped at €20,000.
Fianna Fáil’s housing spokesman Barry Cowen wants the entire scheme capped at €400,000.